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Chapter 1
Recent trends in economic inequality
Disparities in income, wealth and consumption have tended to dominate the discussion on inequality, not only because they contribute directly to the wellbeing of individuals and families, but also because they shape the opportunities people have in life as well as their children’s future: access to goods and services available on the market depends on economic resources as do—to a considerable degree—good educational outcomes and good health. Chapter 1 describes different kinds of economic inequality across and within countries and compares levels and trends of inequality across regions. The evidence presented shows that economic inequalities have declined somewhat across countries in recent years but they have risen within many countries, as wealthier individuals have become wealthier while the relative situation of the poorer segments of the population has not improved. However, trends have been far from universal: as countries have grown and developed, inequalities have increased, in many cases, and have declined in some others. Successful cases of reducing inequalities illustrate the importance of policies and institutions in shaping inequality trends.
I. Trends in global economic inequality Globally, the distribution of income remains very uneven. In 2010, high-income countries – that accounted for only 16 per cent of the world’s population – were estimated to generate 55 per cent of global income.1 Low-income countries created just above one per cent of global income even though they contained 72 per cent of global population. An average gross domestic product (GDP) per capita of $ 2,014 in sub-Saharan Africa in 2010 stood out against regional GDPs per capita of $ 27,640 in the European Union and $ 41,399 in North America. 1 High-income countries are those with a gross national income (GNI) per capita of $12,476 or more in 2011, while low-income countries are those with a GNI per capita of $1,025 or less, according to the World Bank. GDP adjusted for purchasing power parity (PPP) at 2005 constant international dollars from the World Bank World Development Indicators Database, accessed between 15 and 30 July 2012 and available [online] at: http://databank.worldbank.org/ddp/home.do?Step=3&id=4.